Guest post by Oliver Deed of Snapdragon Consulting on the Autumn Statement and Comprehensive Spending Review (November 2015):
The Chancellor stood up for an hour this afternoon and delivered the Government’s Comprehensive Spending Review (CSR) and the Autumn Statement.
As with every set piece economic speech made in the House of Commons, the pundits await the “rabbits” that will come hurtling out of the Chancellor’s hat.
Well, he pulled out two this time around. After announcing an unexpectedly buoyant set of Office of Budget Responsibility (OBR) forecasts on public expenditure and economic growth, the Chancellor announced that he would not be introducing changes to Tax Credits, after the House of Lords voted against government proposals in late October.
That was the first rabbit. We had to wait until the end of his speech for the second. Despite expectations to the contrary, the Chancellor has pledged to protect the police budget. Perhaps in response to recent events in Europe and around the world, the government has decided the police budget should not be cut, which along with increases in funding for the security services, will reassure the British public at a turbulent time for world affairs.
Elsewhere, the Government announced that Small Business Rate relief will be extended for another year, benefiting 600,000 small businesses.
There was no further information on the Business Rates review, and the operation budget at the Business, Innovation and Skills department will be reduced by 17% by the end of the decade. This was less than expected, but we wait to see which programmes BIS will have to cut.
The long-awaited details of the Apprenticeship Levy were announced. A 0.5% payroll tax which will finance a £2bn a year apprenticeship programme, designed to help train 3m apprentices by 2020. A £15,000 allowance will also be instituted meaning those with a payroll bill of less than £3m will be exempt.
On housebuilding, a number of measures were announced including:
- Doubling the housing budget to £2bn to help finance 400,000 more affordable homes;
- 135,000 new Help to Buy: Shared Ownerships homes;
- Extension of Right to Buy;
- Public land made available for 160,000 homes and re-designating commercial land for starter homes;
- A new London Help to Buy scheme;
- An additional 3 per cent stamp duty on Buy to Let and Second homes, raising £1bn by 2021.
So, if you are a small business, or an operator, our advice would be: watch this space. The detail will unfold in the coming days, and this is often when the devil emerges.